Business

Tourism: Foreign Tourists Might Get Tax Refund On Indian Goods; Expert Says Beneficial For India

The tourism and exports industries have pushed for tax refunds to foreign tourists on goods being taken outside India. Popular destinations like the United Kingdom, UAE, and Singapore are on the lines of this provision. According to the experts, this will attract international travelers and encourage them to shop more in the country.

Section 15 Of IGST Act, 2017

Industry executives and experts said section 15 of the IGST Act, 2017 provides for the Tax Refund for Tourists scheme. However, it is yet to be implemented. The issue has been taken up collectively by industry associations ahead of the Union budget for 2023-24, said Jyoti Mayal, vice chairperson, Federation of Associations for Indian Tourism and Hospitality.

Experts On Tax Refund

The industry body’s consulting CEO Aashish Gupta said the tax refund scheme for tourists was kept in abeyance when goods and services tax (GST) was rolled out, on July 1, 2017, since back-end systems and the IT infrastructure needed to be enabled for its last-mile implementation.

“We understand that there is work going on around this. We have been taking it up with the tourism ministry as part of the budget proposal as well. This should be implemented,” the CEO added.

President of the Indian Associate of Tour Operator, Rajiv Mehra said that the association recently wrote to the finance ministry regarding the tax refund.

Mr. Mehra said, “It is in our budget recommendations and we have mentioned that this needs to be made available for all foreign tourists. The basic infrastructure needs to be worked out. Our proposal is very simple – the GST on shopping applied for foreign tourists should be given back to them. It’s there in the GST law and should be implemented now.”

The government should practice tax refunds for tourists. It give a boost to the tourism and lifestyle sectors of export, said the director general of Federation of Indian Export Organization, Ajay Sahai.

“Several countries including competing retail markets such as Singapore, China, Thailand and Dubai. They have already introduced similar VAT/GST refund schemes for tourists,” said Sahai.

Tax Refunds Will Increase Demands: Expert

Mr. Sahai said, “They are benefiting from increased sales and exports of local goods to international visitors due to the added incentive of tax refunds.”

“The merchants in many of these markets compete directly with Indian retailers. Across a broad cross-section of goods offered, such as jeweler, textiles and lifestyle products,” he said.

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Alina Khan

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